28.03.2012 - A report prepared by a Working Group set up in the context of the European Bank Coordination "Vienna" Initiative
This report presents the analysis of the Working Group on non-performing loans set up in March 2011 and of which the conclusions and recommendations were discussed and adopted at the Full Forum of the European Bank Coordination "Vienna" Initiative in Brussels on 12-13 March 2012. Participation in the Working Group reflected the public-private cooperation effort at the heart of the European Bank Coordination Initiative and included representatives from commercial banks active in emerging Europe, supervisors from both banks’ home and host countries, the European Commission, ECB, EIB and EBRD. IMF and World Bank staff coordinated the input. The report finds that possibilities exist for stimulating the resolution of non-performing loans to support recovery. The report calls for a pro-active cooperative approach to deal with non-performing loans with distinctive roles for each stakeholder: the relevant country authorities should press ahead with removing burdensome regulatory, tax and legal impediments to non-performing loans resolution; regulators should tighten supervision appropriately so as to eliminate incentives to let non-performing loans linger; banks should step up their collective effort to speed up non-performing loans resolution; and avenues for out-of-court debt restructuring and corporate rehabilitation negotiations between debtors and creditors should be explored.